Case Note & Summary
The appellant, Cargill India Private Limited, filed a suit for damages of Rs. 2 crores against the respondent, Shri Adinath Sahakari Sakhar Karkhana Limited, a sugar cooperative society, for breach of a contract dated 31 December 2007 whereby the respondent agreed to supply 10,000 MT of sugar for export. The appellant complied with Section 164 of the Maharashtra Cooperative Societies Act, 1960 by giving notice to the Sugar Commissioner and filing suit after expiry of two months. The respondent in its written statement contended that the appellant had become a member of the society and thus the suit was barred under the Act. The trial court framed issues on jurisdiction and bar of law, and held that it had no jurisdiction and the suit was barred, ordering return of plaint. The appellant challenged this order. The High Court noted that the appellant was not a member of the respondent society, as the respondent's own written statement admitted that the appellant became a member only after the suit agreement. The court held that Section 164 of the Act bars suits only in respect of disputes touching the business of the society between members or between member and society, and does not apply to a non-member suing for breach of contract. The court also noted that the appellant had given the requisite notice under Section 164. Therefore, the civil court had jurisdiction. The High Court allowed the appeal, set aside the trial court's order, and directed the trial court to proceed with the suit in accordance with law.
Headnote
A) Civil Procedure - Jurisdiction - Return of Plaint - Suit for damages by non-member against cooperative society - Civil court has jurisdiction to entertain suit for breach of contract where plaintiff is not a member of the defendant society - Section 164 of Maharashtra Cooperative Societies Act, 1960 does not bar such suit - Held that the trial court erred in returning the plaint for lack of jurisdiction (Paras 7-10).
B) Cooperative Societies - Bar of Suit - Section 164 Maharashtra Cooperative Societies Act, 1960 - Applicability to non-members - The bar under Section 164 applies only to disputes between members or between member and society touching business of society - A non-member suing for damages for breach of contract is not covered - Held that the suit is maintainable before civil court (Paras 7-10).
Issue of Consideration
Whether the civil court has jurisdiction to entertain a suit for damages filed by a non-member against a cooperative society for breach of contract, and whether such suit is barred under Section 164 of the Maharashtra Cooperative Societies Act, 1960.
Final Decision
The High Court allowed the appeal, set aside the impugned order dated 17 April 2013, and directed the trial court to proceed with the suit in accordance with law. Rule made absolute.
Law Points
- Jurisdiction of civil court
- Bar of suit under Section 164 of Maharashtra Cooperative Societies Act
- 1960
- Non-member suing cooperative society for breach of contract
- Notice under Section 164
- Return of plaint
Case Details
2013 LawText (BOM) (09) 69
Appeal from Order No. 954 of 2013
Mr. Mayur Khandeparkar for the Appellant, Mr. G.S. Godbole with Mr. Drupad S. Patil for the Respondent
Cargill India Private Limited
Shri Adinath Sahakari Sakhar Karkhana Limited
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Nature of Litigation
Civil appeal against order returning plaint for lack of jurisdiction in a suit for damages.
Remedy Sought
Appellant sought to set aside the trial court's order returning the plaint and to have the suit tried by the civil court.
Filing Reason
The trial court held it had no jurisdiction to entertain the suit for damages filed by the appellant against the respondent cooperative society, allegedly barred under Section 164 of the Maharashtra Cooperative Societies Act, 1960.
Previous Decisions
The Joint Civil Judge, Senior Division, Barshi, by order dated 17 April 2013, returned the plaint for lack of jurisdiction.
Issues
Whether the civil court has jurisdiction to entertain a suit for damages filed by a non-member against a cooperative society for breach of contract.
Whether the suit is barred under Section 164 of the Maharashtra Cooperative Societies Act, 1960.
Submissions/Arguments
Appellant argued that it was not a member of the respondent society at the time of the contract and had complied with Section 164 notice, thus civil court had jurisdiction.
Respondent contended that the appellant had become a member and the suit was barred under the Act.
Ratio Decidendi
A civil court has jurisdiction to entertain a suit for damages by a non-member against a cooperative society for breach of contract, as Section 164 of the Maharashtra Cooperative Societies Act, 1960 bars only disputes between members or between member and society touching the business of the society, and does not apply to non-members.
Judgment Excerpts
The Appellant/original Plaintiff has challenged order dated 17 April 2013 passed by the Joint Civil Judge, Senior Division, Barshi, whereby the following order is passed : “(1) This Court has no jurisdiction to try and entertain the present suit. Therefore, plaint be returned to the plaintiff for proper presentation before the competent Court as discussed above.”
Admittedly, as averred, the Appellant has complied with the provisions of Section 164 of the Maharashtra Cooperative societies Act, 1960 (for short, “the Act”) and given notice dated 24 March 2008 accordingly to the concerned Sugar Commissioner and filed the Suit after the expiry of the statutory period of two months.
The learned Judge, after considering the admission position on record and so also the judgment cited by the parties including Margret Almeida and others vs. The Bombay Catholic ...
Procedural History
The appellant filed a suit for damages before the Civil Judge, Senior Division, Barshi. The respondent filed a written statement raising objection to jurisdiction. The trial court framed issues and by order dated 17 April 2013 held it had no jurisdiction and returned the plaint. The appellant appealed to the High Court.
Acts & Sections
- Maharashtra Cooperative Societies Act, 1960: Section 164
