Case Note & Summary
The petitioner, defendant No.3 (Branch Manager of Karnataka State Co-operative Consumer's Federation Ltd.), filed a Civil Revision Petition under Section 115 CPC challenging the order dated 21.03.2023 passed by the I Additional Senior Civil Judge and JMFC, Bagalkot in O.S. No.194/2020. The Trial Court had dismissed I.A. No.5 filed by defendant No.3 under Order VII Rule 11(d) CPC read with Section 125 of the Karnataka Co-operative Societies Act, 1959, seeking rejection of the plaint. The plaintiff (respondent No.1) had filed the suit seeking recovery of Rs.2,00,00,000/- as damages from defendants No.1 to 3 along with interest at 18% per annum. The plaintiff alleged that the defendants had committed illegal acts causing loss. The petitioner argued that the suit was barred under Section 125 of the Karnataka Co-operative Societies Act, 1959, which bars civil courts from entertaining suits relating to the business of a co-operative society. The High Court examined the scope of Section 125 and held that the bar applies only to matters falling within the purview of the Act. Since the suit was for damages for alleged illegal acts not connected with the business of the society, the civil court had jurisdiction. The court found no error in the Trial Court's order and dismissed the revision petition, confirming that the suit is maintainable.
Headnote
A) Civil Procedure Code - Rejection of Plaint - Order VII Rule 11(d) - Bar of Jurisdiction - The court considered whether the plaint should be rejected as barred by law under Section 125 of the Karnataka Co-operative Societies Act, 1959. The Trial Court dismissed the application, and the High Court upheld that decision, holding that the suit for damages for acts not covered by the Act is maintainable. (Paras 1-8) B) Co-operative Societies - Bar of Jurisdiction - Section 125 of Karnataka Co-operative Societies Act, 1959 - The provision bars civil courts from entertaining suits relating to the business of a co-operative society. However, the High Court held that the suit for damages for alleged illegal acts of the society's employees, which are not part of the society's business, is not barred. (Paras 5-8) C) Damages - Maintainability of Suit - The plaintiff sought damages of Rs.2,00,00,000/- for alleged illegal acts of the defendants. The court held that such a suit is not barred under Section 125 of the Act as the claim is for damages for acts outside the scope of the co-operative society's functions. (Paras 2-8)
Issue of Consideration
Whether the civil court has jurisdiction to entertain a suit for damages against a co-operative society and its employees, in view of the bar under Section 125 of the Karnataka Co-operative Societies Act, 1959.
Final Decision
The High Court dismissed the Civil Revision Petition, confirming the Trial Court's order and holding that the suit is maintainable and not barred under Section 125 of the Karnataka Co-operative Societies Act, 1959.
Law Points
- Order VII Rule 11(d) CPC
- Section 125 of Karnataka Co-operative Societies Act
- 1959
- Bar of jurisdiction of civil courts
- Scope of co-operative society's functions
- Maintainability of suit for damages
