Jharkhand High Court
…. vs …. on 29 April, 2025
Author: Sanjay Kumar Dwivedi
Bench: Sanjay Kumar Dwivedi
( 2025:JHHC:12750 )
IN THE HIGH COURT OF JHARKHAND AT RANCHI
C.M.P. No. 758 of 2023
Prabhakar Kanth, (age 66 years) son of late Janardan Kanth, C/O Sri Rajendra Prasad,
Parmeshwar Dayal road, Barmasia, P.O. Deoghar, P.S. Deoghar, Town, District-Deoghar
....Versus....
1. The State of Jharkhand, through the Secretary, Department of Agriculture, Animal
Husbandary and Cooperative, Nepal House, P.O. & P.S. Doranda, Ranchi -834002.
2. Deoghar Zila (Sahakari Kshetra) Rastriyakrit Bank Karmachari Bachat Evam
Swablambi Sahkari Samiti Limited, Deoghar, having its registered office at Biharilal
Chakraborty Lane, near Bengali Dharmsala, Deoghar, P.O. Deoghar -814112, P.S
Deoghar Town, District Deoghar through its Secretary. .................Opp. Parties
CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI
For the Petitioner : Mr. Chandrashekhar Pandey, Advocate
Mr. Lakshmi Kant Choudhary, Advocate
Mr. S.K. Jha, Advocate
Mrs. Bina Pandey, Advocate
For the O.P. No. 1 :Mr. K.K. Bhatt, A.C. to S.C.-I
For the O.P. No.2 : Mr. Parth Jalan, Advocate
........
08/Dated: 29/04/2025
Heard Mr. Chandrashekhar Pandey, learned counsel for the
petitioner, Mr. K.K. Bhatt, learned counsel for the O.P. No.1-State and Mr. Parth
Jalan, learned counsel for the O.P. No.2- Deoghar Zila (Sahakari Kshetra)
Rastriyakrit Bank Karmachari Bachat Evam Swablambi Sahkari Samiti Limited,
Deoghar.
2. This petition has been filed under Article 227 of the Constitution of
India for setting aside order dated 20.02.2023 passed by learned Civil Judge
(Sr. Division)-III, Deoghar in M.C.A. No. 250 of 2022 (arising out of Original
Suit No. 27 of 2018) whereby the learned court has been pleased to reject the
application filed under Order VII, Rule 11, read with Section 151 of the Code of
Civil Procedure.
3. Mr. Chandrashekhar Pandey, learned counsel for the petitioner
submits that the petitioner was the president of the respondent Co-operative
Society namely (Sahakari Kshetra) Deoghar Zila Rastriyakrit Bank Karmachari
Bachat Evam Swablambi Sahkari Samiti Limited, Deoghar, from 04.08.2004 to
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08.10.2017. He further submits that one of the secretary namely, Mr. Baliyase,
in connivance with some of the directors got the petitioner removed from the
post of President of Sahakari Samiti illegally without following the norms of the
bye-laws of the said society. He then submits that one Sri Ashim Kumar
Mukherjee was never elected as president in place of petitioner herein rather
he was nominated by the conspirators in place of the petitioner and no
intimation of removal of the petitioner was ever communicated and it was
verbally informed that he has been removed from the post of president. He
further submits that the petitioner was intent to have audit and inquiry of the
Societies as he was apprehending that mischief will be played by the newly
made committee member of the said society. He further submits that the
petitioner was pursuing the audit account in view of that present Original Suit
No. 27 of 2018 was instituted and it was instituted for recovery of Rs.
56,60,292/- along with interest against the petitioner. He then submits that on
issuing the notice the petitioner has appeared and filed the written statement.
He further submits that Nand Lal Baliyase is the Secretary of Sahakari Samiti
and he has manipulated in getting the authorization of Director Council or by
General Body to file the instant money suit in the civil court for recovery of loan
amount to the tune of Rs.56,60,292/-. He submits that the said has been done
against Section 50 of the Jharkhand Self Supporting Cooperative Societies Act,
1996 (hereinafter referred the Act). He further submits that Secretary and
President are defaulter of more than Rs.1.37 Crores for which petitioner was
always making question while he was the President of the Society. In this
background he submits that the petitioner herein filed a petition under Order
VII, Rule 11, read with Section 151 of the Code of Civil Procedure praying
therein to reject the plaint filed by the respondent-plaintiff and the learned
court has been pleased to reject the same by impugned order dated
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20.02.2023. He further submits that in the light of Section 40 and 41 read
with Section 50 of the said Act the same is barred. He further submits that the
learned court has wrongly interpreted provisions of Sections 40, 41, 50 of the
said Act in view of that the said order may kindly be set aside. He further
submits that dispute in nature is coming within parameter of Section 40 of the
said Act read with Section 41 of said Act. In view of that any proceeding with
regard to dispute in question will lie before the tribunal constituted under the
said Act. On these grounds, he submits that the impugned order may kindly be
set aside.
4. Per contra Mr. Parth Jalan, learned counsel for the O.P. No.2
opposes the prayer and submits that learned court has rightly passed the
order. According to him in the light of Section 40 read with section 41 of the Act
dispute of this nature cannot be a subject matter before the learned tribunal
under the said Act. He further submits that dispute is with regard to
deficiency, loss or unprofitable outlay occasioned by his negligence or
misconduct or of any such amount which ought to have been accounted but
is not brought into account by a person can be subject matter of the tribunal
and in view of that Section 50 of the Act is not coming into play as such Civil
Court itself is having jurisdiction. He submits that the learned court has rightly
passed the said order. He submits that removal is not disputed by the
petitioner herein.
5. Learned counsel for the State-O.P. No.1 submits that Registrar is
having only jurisdiction to decide the said dispute.
6. In view of above submissions of the learned counsel for the parties
the court has gone through the materials on record including impugned order
as well as the petition under Order VII, Rule 11, read with Section 151 of the
Code of Civil Procedure. It is an admitted position that the petitioner was the
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president of the said Cooperative Society and subsequently he has been
removed. It has been contended that there is no removal order and orally he
has been ousted. There is no denial of that fact by the O.P. No.2.
7. Admittedly the suit was filed for recovery of Rs.56,60,292/- along
with interest. The dispute is there and all the amount to be recovered from the
petitioner in view of that it is crystal clear that touching of the business of the
society. For ready reference Section 40 of the said Act is quoted hereinbelow:-
” 40. Settlement of disputes. (1) If any dispute arises touching the
constitution, management or business of a Co-operative Society, and matters
connected therewith or incidental thereto-
(a) among members, past members and persons claiming through members,
past members and deceased members, or
(b) between a member, past member or a person claiming through a
member, past member or deceased member and the Co-operative Society,
its-board, director, office-bearer or liquidator, past or present, or
(c) between the Co-operative Society or its board and any past board,
director, office-bearer, or the nominee, heirs or legal representatives of any
deceased director, deceased office-bearer of the Co-operative Society, or
(d) between the Co-operative Society and any other Co-operative Society, or
(e) between the promoters of a Co-operative Society and the Registrar, or a
Co-operative Society and the Registrar, or
(f) between a Co-operative Society and liquidator of another Co-operative
Society or between the liquidators of two or more Co-operative Societies,
Such disputes may be referred to the Co-operative Tribunal for decision:
Provided that no dispute shall be referred under this section to the Co-
operatin Tribunal unless the disputing parties exhausted all remedies that
may be available in the bye-laws for the settlement of disputes.
(2) Any dispute relating to elections held to a Co-operative Society may be
referred to the Co-operative Tribunal for decision.
(3) Any appeal against a decision of the Tribunal shall lie before the High
Coun within sixty days of the date of order.”
8. In view of above provision, it transpires that any dispute arising out
of constitution management or business of a Co-operative Society including its
member and past member can be referred to the tribunal. For Section 41 of the
said Act speaks of power of the tribunal to order of recovery. Section 50 of the
said Act speaks as under:-
“50. Bar of Jurisdiction of Court.-(1) Save as otherwise expressly
provided
in this Act, no Civil or Revenue Court shall have any jurisdiction in respect
of any dispute required by Section 40 to be referred to the Co-operative
Tribunal or recovery proceedings under Section 41 or dissolution under
Sections 43 and 44.
(2) While a Co-operative Society is in liquidation under Section 45, no suit
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( 2025:JHHC:12750 )or other legal proceedings shall be proceeded with or instituted against
the liquidator as much or against the Co-operative Society or any member
thereof on any matter touching the affairs of the Co-operative Society,
except by leave of the Registrar and subject to such terms as he may
impose.”
9. In the light of above section it is crystal clear that jurisdiction of
Civil Court is barred with regard to dispute which is coming within the scope
of section 40 and Section 41 of the said Act.
10. Admittedly, transaction as alleged was arising out of business of
the said society and the petitioner was a member of the said Society. Section
40 of the said Act clearly suggests that any dispute arising out of touching the
constitution management or business of a Co-operative Society between the
member and past member will be referred to the Tribunal and the powers of
the tribunal is prescribed in Section 41 of the said Act. Even it is accepted for
the sake of argument that it was not sufficient that there should be a dispute
touching the business of the society and what is further required is that
dispute must be between society and its member. Section 40 of the said Act
speaks that any dispute between the member and the past member can be
subject matter of the tribunal only.
11. In the light of above, the dispute concerned the business of the
registered society as discussed hereinabove then the dispute with regard to
the same is barred under section 50 of the said Act and tribunal constituted
under the said Act is only having the power.
12. Admittedly, the society business was to grant loan to the
employees of the nationalized bank and in the light of that allegations are
made that amount has been taken by the petitioner herein and in view of
that it relates to the business of the registered society.
13. In this background petition filed under Order VII, Rule 11, read
with Section 151 of the Code of Civil Procedure has been filed by the petitioner
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which has been rejected by the learned court.
14. For deciding petition under Order VII, Rule 11 read with Section
151 of the Code of Civil Procedure the Court is not required to look into any
evidence and only the law is required to be considered in the light averment
made in the said petition.
15. Only averments are required to be read of the plaint and any
addition and subtraction are not the requirement of law and even the evidence
is not required to look into. Reference may be made to the case of “Kamla
and others Vs. K.T. Eshwara Sa and Others” reported in (2008) 4 SCC
204 wherein the Hon’ble Supreme Court in paras 15 and 16 has held as
under:-
“15. Order VII, Rule 11(d) of the Code has limited application. It must be
shown that the suit is barred under any law. Such a conclusion must be drawn
from the averments made in the plaint. Different clauses in Order VII, Rule 11,
in our opinion, should not be mixed up. Whereas in a given case, an application
for rejection of the plaint may be filed on more than one ground specified in
various sub-clauses thereof, a clear finding to that effect must be arrived at.
What would be relevant for invoking clause (d) of Order VII, Rule 11 of the
Code is the averments made in the plaint. For that purpose, there cannot be any
addition or subtraction. Absence of jurisdiction on the part of a court can be
invoked at different stages and under different provisions of the Code. Order
VII, Rule 11 of the Code is one. Order XIV, Rule 2 is another.
16. For the purpose of invoking Order VII, Rule 11(d) of the Code, no amount of
evidence can be looked into. The issues on merit of the matter which may arise
between the parties would not be within the realm of the Court at that stage. All
issues shall not be the subject matter of an order under the said provision. The
principles of res judicata, when attracted, would bar another suit in view of
Section 12 of the Code. The question involving a mixed question of law and fact
which may require not only examination of the plaint but also other evidence
and the order passed in the earlier suit may be taken up either as a preliminary
issue or at the final hearing, but, the said question cannot be determined at that
stage.
It is one thing to say that the averments made in the plaint on their face
discloses no cause of action, but it is another thing to say that although the
same discloses a cause of action, the same is barred by a law.
The decisions rendered by this Court as also by various High Courts are not
uniform in this behalf. But, then the broad principle which can be culled out
therefrom is that the court at that stage would not consider any evidence or
enter into a disputed question of fact of law. In the event, the jurisdiction of the
court is found to be barred by any law, meaning thereby, the subject matter
thereof, the application for registration of plaint should be entertained.”
16. Admittedly what has been discussed hereinabove the suit is
barred under Section 50 of the said Act as the dispute is arising between
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members and past members which relates to the business of cooperative
society.
17. In this background the Court finds that the Civil Court is having no
jurisdiction to decide the dispute and only the tribunal constituted under the
said Act can decide the said dispute. As such the impugned order dated
20.02.2023 passed by learned Civil Judge (Sr. Division)-III, Deoghar in M.C.A.
No. 250 of 2022 (arising out of Original Suit No. 27 of 2018) is set aside and
the petition filed by the petitioner under Order VII, Rule 11, read with Section
151 of the Code of Civil Procedure is hereby allowed. Consequently, Original
Suit No. 27 of 2018 is dismissed as it is barred by law.
18. In view of above it is open to the O.P. No.2, if so advised, may
move before the cooperative Tribunal in the light of constitution made under
section 41 of the said Act.
19. This petition is allowed in above terms and disposed of. Pending
I.A, if any, stands disposed of.
( Sanjay Kumar Dwivedi, J.)
Satyarthi/A.F.R.
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