M.K.Indrajeet Sinhji Cotton P.Ltd. Vs. Narmada Cotto Coop.Spg.Mills Ltd. & Ors, on 26th April, 2016; Supreme Court of India: Case Brief – Read Judgement

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Question of Tenability of Suit being ‘judicial’ is purely within jurisdiction and competence of the Court where suit is pending
Civil Appeal No. 766 of 2016
Bench: Justice S. A. Bobde; Justice Amitava Roy

Case Brief: In the facts of the present case, the appellant being the private limited company entered into a lease agreement and in terms of which it took on lease the mill of the respondent Co- operative society for a 5 years period. When disputes were arisen the Appellant preferred to file suit before the City Civil Court against the Respondent- Society in the year 2000 and claimed Rs. 2,51,89,606/- rupees recovery with interest at the rate of 21 per cents per annum. Further, notably, the respondent- society, within a year of filing the suit, was wound up by 2001’s order passed by Commissioner, however, since the suit was filed earlier, the appellant was obliged to apply for leave for continuing the said suit by virtue of Section 112 of the Gujarat Co-operative Societies Act, 1961. it was seen that the said permission to continue the suit to the appellant was not granted by the Registrar of the Co- operative societies on the ground that the suit is not tenable for want of notice as per section 167 of the Act of 1961. Such notice as per Registrar to be given addressed to him stating the cause of action and the relief which the plaintiff in the suit claims. Moreover, when appellant approached to the Single Judge of High Court, his writ petition was allowed, but the Division Bench of the High Court by allowing the appeal by respondents upheld the order of Registrar, thus matter was before this Bench.

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The Bench firstly observed the nature and scope of the power of Registrar which is provided under the provisions of the section 167 of the said Act. It was found that the said power is conferred for considering whether a suit should be filed against a society which is under liquidation. Further, bench observed that the Registrar is not concerned with the merits or the tenability of the suit which is, in any case not before him, and indeed cannot be because such a suit can only be tried and conclusively decided by a Civil Court. The question of tenability of the suit being judicial is purely within the jurisdiction and competence of the court where the suit is pending. Moreover, bench also found that the there is no doubt that a question ‘whether a suit is tenable under Section 167 of the Co-operative Societies Act for want of notice’ is within the exclusive competence of a Civil Court. As such, bench found that the Registrar had no jurisdiction to hold that the suit is not tenable. Thus, Registrar’s order is set aside and appeal of appellant allowed and bench asked the Registrar to decide the question of permission for continuing the suit, afresh.

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Read the Judgement: M.K.Indrajeet Sinhji Cotton P.Ltd. Vs. Narmada Cotto Coop.Spg.Mills Ltd. & Ors

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