SATYA PARKASH Vs. NATIONAL URBAN CO-OPERATIVE BANK

JUDGEMENT

(1.) This appeal has been filed against the judgment of the learned Additional District Judge, Hoshiarpur, dated December 9, 1960, by which he affirmed the judgment of the trial Court dismissing the suit of the plaintiffs.

(2.) Briefly, the facts of this case are that Harbans Lal, defendant No. 3, who was a share-holder of defendant No. 1, made an application to it for advancing him a loan of Rs. 10,000/- by mortgage of his house situated in Hoshiarpur City. He was allowed a loan of Rs. 10,000/- on the security of his house and on furnishing surety of Dr. Satya Parkash Chopra, the plaintiff, on April 8, 1947, by resolution Exhibit D. 1, Harbans Lal subsequently sold the house to one Chuni Lal Mehta in 1949 and the amount which was to be paid to defendant No. 1 was left with the vendee for payment to it. He did not pay the amount and defendant No. 1 obtained an award against Harbans Lal, defendant No. 3, and took proceedings to realize the said amount through Court. The whole of the amount was not recovered from defendant No. 3. Therefore, Ram Chand defendant No. 2, made an application to the Assistant Registrar, Co-operative Societies, on November 6, 1956, that the balance amount should be recovered from Satya Parkash Chopra and Kirpa Ram, plaintiffs, who were responsible for advancing the loan to Harbans Lal. The Assistant Registrar, Co-operative Societies, informed the plaintiffs that the dispute between them and the Bank had been referred to the arbitration of Shri Kartar Singh. The plaintiffs felt dissatisfied with that order and served a notice on the Registrar under Section 59 of the Punjab Co-operative Societies Act, 1954 (hereinafter referred to as 'the Act') that he had no jurisdiction to refer the matter to the arbitration and that he should suspend the order so that they could get the matter settled from a Civil Court. The Assistant Registrar by his order, dated April 9, 1958, suspended the order and allowed them to get the matter settled from the Civil Court by a regular suit. Satya Parkash Chopra and Kirpa Ram, plaintiffs, then instituted the civil suit on the ground that the appointment of Kartar Singh as Arbitrator was illegal, without jurisdiction and void and that the Assistant Registrar had no right to refer the matter to him. It was further averred that action of Ram Chand was mala fide and he could not make any application to the Assistant Registrar. It is further alleged that the award had been obtained against Harbans Lal, the debtor, and after the obtaining of the award, all disputes between Harbans Lal and defendant No. 1 came to an end. It was also stated in the plaint that defendant No. 1 agreed to allow Chuni Lal to make payment of the amount recoverable from Harbans Lal in instalments. Therefore, the new agreement absolved the plaintiffs from their liability if any, to make good the loss occasioned to defendant No. 2, on account of non-payment of the said loan. The suit was contested by the Bank and Ram Chand, defendant No. 2, who controverted all the pleas of the plaintiffs and submitted that the appointment of the Arbitrator by the Assistant Registrar was valid and within his jurisdiction. On the pleadings of the parties, the following issues were framed :-

(3.) The trial Court dismissed the suit of the plaintiffs and, on appeal, the Additional District Judge, Hoshiarpur, also reached at the same conclusion and he dismissed the appeal. It may be mentioned here that Kirpa Ram died during the pendency of the suit and his legal representatives were brought on record by the trial Court.