SYNDICATE BANK Vs. SMALL FARMERS MARGINAL FARMERS SC AND ST SPRINKLER COMMUNITY IRRIGATION WELLS CO OP SOCIETY LTD

JUDGEMENT

(1.) UNSUCCESSFUL plaintiff is the appellant. PlaintiffSyndicate Bank is a nationalised bank; it instituted the suit on 2-6-1987, for recovery of money from defendants 1 to 13. The first defendant is a Co-operative Society registered under the Karnataka Co-operative Societies Act, 1959. Defendant-4 was the President of the Society. The President and members of the Managing Committee, in pursuance of resolution dated 6-6-1979, borrowed a sum of Rs. 1,58,000/- at 10 1/2% interest per annum to be repaid in five equal annual instalments commencing from 30th May 1980. They jointly executed a promissory note on 8th June 1979. Defendants 2 and 3 are the Secretary and Chairman of the Society, respectively. Defendants 4 to 13 are the members of the Society. It is averred in the plaint that out of the sanctioned loan amount a sum of Rs. 1,51, 281-00 has been disbursed, from time to time, to defendants 4 to 13 i.e. members. On 8th June 1979, they also executed personal guarantee bonds in favour of plaintiff. Properties in Plaint 'A' and 'B' Schedules are those given as security to the plaintiff for due discharge of loan amounts taken. The defendants while admitting the loan transaction, contended that suit is untenable and is liable to be dismissed. There were other contentions also. On the preliminary question regard ing maintainability, issue No. 4 was framed. After hearing the arguments, the learned Judge has held that suit is not maintainable; accordingly it is dismissed. Mr. Ashwathram, learned Counsel for appellant, submitted that the decision of the Court below is erroneous. Alternati vely, he submitted that if the suit is not maintainable on the ground that the Court had no jurisdiction, the plaint could have been returned for presentation to proper court or it could have been rejected under O. 7, R. 11(d),C.P.C. As our decision on the said submissions has to solely rest on the construction to be placed on the relevant statutory provisions, we propose to dispose of the appeal accordingly at the stage of admission itself. We are mainly concerned with. Karna taka Co-operative Societies Act, 1959 (Act 11 of 1959) (hereinafter called 'K.C.S. Act'), which came into force on 1st June 1960, and Karnataka Agricultural Credit Operations and Miscellaneous Pro visions Act, 1974, Act 2 of 1975 (herein after called "Credit Operations Act"), which came into force on 17th July 1975. By Section 17 (Chapter 4) of Credit Operations Act, certain provisions of K.C.S. Act were amended by inserting couple of new provisions. Therefore, the provisions of K.C.S. Act, 1959, have to be read with these insertions. Relevant provisions are: