Bansi Ram v. The Tyali Co-operative Consumer Store/Society

H

ig h Co ur t o f H

.P

.

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA

FAO No. 69 of 2021

Decided on 14^th December 2023

Bansi Ram & Ors.

…Appellants

Versus

The Tyali Cooperative Consumer Store & Anr. …Respondents

Coram

Hon'ble Mr. Justice Ajay Mohan Goel, Judge

1 Whether approved for reporting? Yes. For the appellants: Mr. Surinder Saklani, Advocate. For the respondents: Mr. Y.P. Sood, Advocate.

Ajay Mohan Goel, Judge (Oral) By way of this appeal, the appellants have challenged the judgment dated 30.04.2019, passed by the Court of learned District Judge (Forest), Shimla, in Civil Appeal No.18-S/13 of 2017/2015, titled The Tyali Co-operative Consumer Store/Society vs. Bansi Ram & Ors., in terms whereof, the learned Appellate Court while allowing the appeal of the respondents herein set aside the order dated 18.03.2015, passed by the Court of learned Civil Judge, Senior Division Theog, in CMA No.11 of 2006 of 2015, titled The Tyali Co-operative Consumer Store & Anr. vs. Bansi Ram & Ors., in

1

2

terms whereof, an application filed under Order 7 Rule 11 read with Section 151 of the Code of Civil Procedure by the petitioners herein/defendants was allowed.

2. Brief facts necessary for the adjudication of this appeal are that respondents/plaintiffs (hereinafter referred to as the plaintiffs) have filed a suit against the petitioners/defendants (hereinafter referred to as the defendants) for Permanent Perpetual and Prohibitory Injunction. Petitioners herein filed an application under Order 7 Rule 11 read with Section 151 of the CPC for rejection of the plaint on 30.05.2014. It was averred in the application that the suit filed by the plaintiffs was not maintainable as the plaint did not disclose any cause of action and as the plaintiffs were strangers and not members of the Society and were not having any right, title and interest in the Tyali Cooperative Society, therefore, also the suit was not maintainable. It was further averred in the application that the Court was having no jurisdiction to entertain the suit in terms of the law relating to Cooperative Society and no Court including a Civil Court was having power or jurisdiction to entertain any such suit.

3

3. The application was resisted by the plaintiffs. In terms of order dated 18.03.2015, passed by the learned Trial Court, the application was allowed. Learned Trial Court returned the following findings while allowing the application, which are being reproduced hereinbelow:-

"11. The present application has been filed by the applicants for invoking sub clause (d) of Rule 11 of Order VIl CPC on the ground that the present suit is barred by Section 72, Section 76 and Section 92 of the Himachal Pradesh Cooperative Societies Act, 1968. A further plea has been raised for invoking sub clause (a) of Rule 11 of Order VIl CPC on the ground that the present suit does not disclose a cause of action. The question of jurisdiction and a bar created to the suit by any law for the time being in force, if it is raised in the defence plea that cannot be the ground on which the plaint can be rejected unless the attraction of such a bar is manifest from the pleadings made in the plaint. Without the aid of the defence pleadings or any other document, the statements made in the plaint themselves should make it appear that the suit is barred by any law for the time being in force as contemplated in sub clause (d) of Rule 11 of Order VII CPC. In the present case, it is evident that the elections of the Tyali Cooperative Consumer Store Limited dated 22.07.2012 has not been held to be valid in the report of Kumari Ranjana Sood Assistant Registrar Cooperative Societies dated 14" March. 2014. Further plaintiff No. 1 Narayan Singh has filed this suit claiming himself to be Secretary of Tyali Cooperative Consumer

4

Store on the basis of election, but again he has been removed from the post of Secretary by order of District Collector Food Civil Supplies and Consumer Affairs Shimla dated 31.12.2014 and Sh. Arjun Bhardwaj has been appointed as Secretary-cum-salesman of the Tyali Consumer Store Limited. Further by way of letter dated 11.12.2013, the Assistant Registrar Cooperative Societies Shimla, Kumari Ranjana Sood, has appointed Sh. Sanjay Mohan inspector Cooperatives Societies Theog as administrator of the Tyali Cooperative Consumer Store Limited with direction to take over the complete charge of the Society and conduct the election of the Managing Committee of the above Society as per rules of elections within six months from his appointment. In view of the aforesaid, the plaintiff No. 1 Sh. Narayan Singh is no longer the Secretary of Tyali Cooperative Consumer Store/Society Dawan nor plaintiff No 2, Sh. Rajinder Chandel, is the Pradhan of Tyali Cooperative Consumer Store/Society Dawan. In the plaint the plaintiffs/respondents have sought an injunction restraining the respondents from causing any type of obstruction or interference in day to day functioning of the Tyali Cooperative Consumer Society Dawan. Since, plaintiff No.1 Sh. Narayan Singh is no longer the Secretary of Tyali Cooperative Consumer Store/Society Dawan, nor plaintiff No.2 Sh. Rajinder Chandel is the Pradhan of Tyali Co-operative Consumer Store/Society Dawan. As such, both the plaintiffs have got no cause of action lo continue with the present suit.

12. The Civil Courts in India, by virtue of Section 9 of the Code of Civil Procedure, 1908 (for short "CPC"), have the jurisdiction to try all suits of a civil nature, excepting suits which

5

are either expressly or impliedly bared. Fundamental to the maintainability of a civil suit is the existence of a cause of action in favour of the plaintiff. This is evident from the various provisions contained in CPC. However, it would be appropriate to notice that Order VIl Rule 1 gives the list of the particulars which have to be mandatorily included in the plaint. Order VII Rule 1(e) mandates the plaintiff to state the facts constituting the cause of action and when it arose. Order VIl Rule 11(a) provides that the plaint shall be rejected where it does not disclose a cause of action. A cause of action is the bundle of facts which are required to be proved for obtaining relief prayed for in the suit. The suit of the plaintiff has to be framed in accordance with Order II. Order II. Rue 1 CPC provides that :

"1 Frame of suit- Every suit shall as far as practicable be framed so as to afford ground for final decision upon the subjects in dispute and to prevent further litigation concerning them.

The aforesaid Rule is required to be read along with Rule 2 which provides that

"2 Suit to include the whole claim- (1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action, but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any court.

13. The aforesaid provisions read together would lead to the firm conclusion that the existence of cause of action is a sine qua non for the maintainability of a civil suit. In the present case since plaintiff No. 1 Sh. Narayan Singh is no longer the Secretary of Tyali Cooperative Consumer Store Society Dawan

6

nor the plaintiff No. 2 Sh. Rajinder Chandel is the Pradhan of Tyali Co-operative Consumer Store/Society Dawan. As such both the plaintiffs have got no cause of action to continue with the present suit. In view of the aforesaid, the present plaint is within the purview of sub clause (a) of Rule 11 of Order VIl CPC on the ground that the present suit does not disclose a cause of action and as such the application filed by the defendants/applicants is hereby allowed and the plaint of the plaintiffs is hereby rejected according to the provisions sub clause (a) of Rule 11 of Order VII CPC. The plaint be returned to the plaintiffs as per rules and the record of this Court after its due completion be consigned to the record room."

4. Feeling aggrieved, the plaintiffs preferred an appeal against the order passed by the learned Trial Court. Learned Appellate Court vide judgment dated 30.04.2019, allowed the same and set aside the order passed by the learned Trial Court and remitted the matter back to the Trial Court for adjudication in accordance with law.

5. Feeling aggrieved, the defendants have filed this appeal.

6. Learned counsel for the appellants has argued that the order passed by the learned Appellate Court is not sustainable in the eyes of law as the learned Appellate Court

7

erred in not appreciating that the suit filed by the plaintiffs was not maintainable without issuance of a notice under Section 76 of the H.P. Cooperative Societies Act, which was a condition precedent; the Appellate Court was swayed by the judgment in Kuldip Singh Pathania's case, which was not applicable to the facts of this case; the plaintiffs being strangers to the Cooperative Society had nothing to do with the day to day affairs of the Society; the First Appellate Court did not take into consideration the fact that the suit was not maintainable against the Society and its members regarding management and functioning of the Society.

7. Learned counsel for the respondents on the other hand has submitted that there was no infirmity in the judgment passed by the learned First Appellate Court as it rightly set aside the order passed by the learned Trial Court, which indeed was a perverse order. He submitted that the Trial Court erred in not applying the basic principle that while deciding an application filed under Order 7 Rule 11 of the CPC, the Court only has to take into consideration the averments made in the plaint. He submitted that a perusal of the order passed by the

8

Trial Court, would demonstrate that said Court took into consideration documents which were not part of the plaint and averments which were not part of the plaint while deciding the application, which had indeed resulted in perversity, which was rightly corrected by the learned Appellate Court. He further submitted that the Appellate Court correctly held that the plaint did disclose a cause of action and it was not hit by any law and the same was maintainable. Accordingly he submitted that as the appeal is without any merit, the same be dismissed.

8. I have heard learned counsel for the parties and I have also carefully gone through the order passed by the learned Trial Court as well as judgment passed by the learned Appellate Court. The record of the case, which is available with this Court, also stands perused.

9. A perusal of the record demonstrates that the suit has been filed by the plaintiffs praying for decree of Permanent Perpetual and Prohibitory Injunction on the ground that in terms of resolution dated 22^ndJuly, 2012 the plaintiffs-Cooperative Society Dawan, has elected seven new members, which also included plaintiff No.2. There was a Consumer Store, which

9

remained non-functional for some time and which subsequently became operational and which was being run from the accommodation of respondent No.2. The plaintiffs had requested Inspector Cooperative Society, who recommended the proposal of the plaintiffs Cooperative Society for running a fair price shop after obtaining the necessary documents and recommendations, the Cooperative Society opened Tyali Consumer Store/Society Dawan. According to the plaintiffs, the defendants for the last more than two-three weeks from the date of filing of the Civil Suit were regularly pressurizing and threatening the plaintiffs and other elected members of the Society with the intention to obstruct the functioning of the consumer store of the Society and primarily it is on this premise that the suit has been filed for restraining the defendants etc., from causing any type of obstruction or interference in any manner in use enjoyment and day to day functioning of the Tyali Cooperative Consumer Society Dawan.

10. In the backdrop of the contents of the plaint, now if one peruses the order passed by the learned Trial Court in the application filed under Order 7 Rule 11 of the CPC, one finds

10

that Trial Court erroneously took into consideration the contentions of the applicants that as plaintiff No.1, Sh. Narayan Singh was no longer the Secretary of the Society and plaintiff No.2, the Pradhan of the Society, so plaintiffs had got no cause of action to continue the present suit. While deciding the application, the Trial Court took into consideration the material placed before it by the applicants from which it concluded that it was evident that election of Tyali Cooperative Consumer Store dated 22.07.2012 had not been held to be valid in terms of the report of the Assistant Registrar dated 14.03.2014.

11. This Court is of the considered view that the moment, the learned Trial Court dwelled upon the maintainability of the suit by taking into consideration material, which was not part of the plaint, it erred itself. It is settled law that while deciding an application filed under Order 7 Rule 11 of the CPC, whether the plaint is liable to be rejected in terms of the provisions contained therein, the Court has to peruse the contents of the plaint only and from it, conclusion has to be drawn whether the plaint is liable to be rejected under any of the provisions of Order 7 Rule 11 or not. The Court neither can

11

look into the written statement and nor can it look into any other material placed before it by the applicants, which is foreign to the plaint.

12. In the light of the fact that the basic ground on which the plaint was rejected by the learned Trial Court was that plaintiff No.1 was no longer Secretary and plaintiff No.2 was no longer Pradhan, therefore, they have no cause of action to continue with the present suit, the rejection of the plaint on these findings is per se perverse and not sustainable in the eyes of law because these facts are not borne out from the contents of the plaint, but were pleaded by the defendants. This in fact, at the most, was the defence of the defendants, and Order 7 Rule 11 could not have been decided on the basis of said contention or said material.

13. Now, in this background, when one pursues the judgment passed by the learned First Appellate Court, one finds that this is exactly what has been held by the learned Appellate Court. It held that law is well settled that under Order 7 Rule 11 of the CPC only pleadings of plaintiffs can form basis of the decision of Court, but no rebuttal made by defendants or any

12

material produced by the defendants could be gone into. It further held that by holding at the initial stage of the suit that plaintiffs No.1 and 2 were not the office bearers of the Tyali Cooperative Society, the Trial Court pre-judged the controversy which was not permissible. Learned Appellate Court also held that the findings returned by the Trial Court that the plaintiffs were having no cause of action was also an erroneous findings because it was not based on any evidence adduced by the parties, as no issue as yet stood framed thereupon. It also observed that the contents of written statement could not have been taken as proof of arriving at such findings.

14. This C urt concurs with the findings, returned by the learned Appellate Court. In fact, in terms of the averments made in the plaint, there is cause of action made out by the plaintiffs. Whether or not that cause is justiciable is a different matter altogether. However, the merit of the cause is different from no cause at all. In the background of the factual matrix narrated in the plaint, by no stretch of imagination it could have been said that the plaint was san any cause of action. The reasoning assigned by the learned Trial Court for rejecting the

13

plaint that plaintiff No.1 was no more was the Secretary and plaintiff No.2 was no more was the Pradhan, is perverse reasoning which has been given by the learned Trial Court while rejecting the plaint under Order 7 Rule 11 of the CPC as by doing so it has dwelled upon the contentions, which were raised by the applicants/defendants before it, qua the demerits of the case of the plaintiffs, which have not the parameter within which an application under Order 7 rule 11 of the CPC can be decided.

15. Hon'ble Supreme Court in Bharu Ram vs. Janak Singh & Ors., (2012) 8 Supreme Court Cases 701, has been pleased to reiterate the principle that while considering an application under Order 7 Rule 11 of the CPC, the Court has to examine the averments in plaint and pleas taken by the respondents in written statement not relevant. The relevant para of the judgment reads as under:-

"15. The law has been settled by this Court in various decisions that while considering an application under Order VII Rule 11 CPC, the Court has to examine the averments in the plaint and the pleas taken by the defendants in its written statements would be irrelevant."

14

16. As far as the provisions of Section 72 of the Cooperative Societies Act are concerned, the said Section provides that a dispute may be referred to Arbitrator, which touches the constitution, management or the business of the Cooperative Society and arises amongst the following:-

"(a) among members, past members and persons claiming through members, past members and deceased members; or

(b) between a member, past member or person claiming through a member, past member, or deceased member and the society, its committee or any officer, agent or employee of the society or liquidator, past or present; or

(c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society; or

(d) between the society and any other co- operative society, between a society and liquidator of another society or between the liquidator of one society and the liquidator of another society; or

(e) 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 58 whether such surety is or is not a member of the society."

The suit in issue does not fall in either of the parameters laid down in clause (a) to (e) of Section 72 of 1968 Act. In fact, there is a complete misreading of the plaint by the defendants

15

for the reason that they have presumed that the present lis has to be assumed as a dispute between the members of the Society because they contend that they are members of the Society, whereas in the plaint, rightly or wrongly, there is no averment to the effect that the defendants were the members of the Society. Similarly, the arguments of the learned counsel that the Appellate Court erred in not appreciating that the suit was bad for non-issue of notice under Section 76 of the 1968 Act, is also without any merit because this Section of the 1968 Act is attracted only when a suit has been instituted against a Society or any of its Officer, whereas, in the present case, the suit was instituted by the Society and not against it or its Officer. Accordingly, in view of the above observation, as this Court does not finds any merit in this appeal and further as this Court does not finds any infirmity in the judgment passed by the learned First Appellate Court, same is dismissed. Pending miscellaneous applications, if any, also stand disposed of.

(Ajay Mohan Goel) Judge

December 14, 2023 (Vinod)