BHAIRAV DEO KARANJE Vs. JAGANNATH G

JUDGEMENT

(1.) The material facts in this case are not in dispute. The opponent is a member of the petitioner co-operative society and he borrowed two loans amounting to Rs. 3200/- and Rs. 7,500/- at 6% p.a. on 11th and 21st January, 1967 respectively. By way of security he pledged 177 bags of ground nut and 31 bags of coriander with the society. The prices of both these commodities fell in July 1967 before the amount became due. The amount was repayable to the society on or before 30th September, 1967. The petitioner society, therefore, by a notice dated 3rd August, 1967 called upon the opponent to furnish additional security for Rs. 5,550/-. By the said notice the opponent was also informed that if he failed to furnish additional security the pledged goods would be sold. The opponent immediately informed the society that the goods should be sold off. However, in the expectation that prices would again rise, the petitioner society did not sell the pledged goods immediately, but they were sold in two instalments on 2nd August, 1968 and 7th August, 1968 and the total amount recovered was Rs. 8,067.70. The balance due, according to the society, was Rs, 4,643/- and finally when a claim was made before the officer on Special Duty under section 91 of the Maharashtra Co-operative Societies Act, the actual amount claimed was Rs. 5,251.85.

(2.) The opponent contested the claim essentially on three grounds. The first ground was that the goods should have been sold immediately after the opponent had directed the society to sell them. The second ground was that the goods were sold by the society without notice to the opponent and the third ground was that the goods were not sold by public auction, but they were sold by private negotiation. The Officer on special duty negatived these defences and found that out of a total amount of Rs. 10,700/- and interest due, after giving credit for Rs. 8,067.70, the opponent was liable to pay Rs, 4,645/- on 1st September, 1968. On this amount interest was made payable at 12% p.a. from 1-9-68 till the date of suit and the amount due till the date of the claim was found to be Rs. 5,251.85 which the society was found entitled to recover. Future interest at 9% p.a. was awarded on Rs. 4,645/-.

(3.) The opponent filed an appeal against the award of he officer on special duty before the Maharashtra Revenue Tribunal. The co-operative Tribunal took the view that notice as required by section 176 of the Contract Act was not given by the society and the failure to give notice was fatal to the claim of the society. The Tribunal also held that the opponent was justified in making a grievance that his goods were not sold by public auction in the market yard and evidence was accepted that the prevailing rates of ground-nut in August 1968 varied between Rs. 115/- to Rs. 130/- and for coriander the rate was Rs. 120/- per quintal. The pledged goods were sold by the society at the rate of Rs. 90/- per quintal for ground-nut and Rs. 120/- for coriander. The Tribunal found that if this was the only "drawback in the case", the claim of the society could not have been reduced which was, however, not necessary because of the earlier finding with regard to non-compliance with the provisions of section 176 of the Contract Act. The sale was, therefore, held to be illegal and the award of the officer on special duty was set aside. The petitioner society has now filed this petition under Article 226 of the Constitution of India.