PHONELX IMPEX Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) The respondent-Bank, namely, the Jodhpur Central Co-operative Bank Limited. Jodhpur (for short 'the Co-operative Bank') is a co-operative society registered under the Rajasthan Co-operative Societies Act, 1965 (Act No. 13 of 1965) (hereinafter to be referred as 'the Act of 1965') and its area of operation is confined to Jodhpur District only. The petitioner, as a member of the Co-operative Bank, borrowed money as a loan from it and as per auction notice (Annexure 1) Rs. 37,98,677/- were outstanding against him. The Co-operative Bank initiated recovery proceedings under the Act of 1965 which were challenged by the petitioner by filing a revision under Section 128 of the said Act. The petitioner also filed the present petition under Articles 226 and 227 of the Constitution of India, challenging recovery proceedings under the Act of 1965. The challenge is on the ground that after establishment of Debts Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the Act of 1993) the recovery proceedings under the Act of 1965 is without jurisdiction and authority of law. In other words, contention of the petitioner is that for the recovery of debt amount the Co-operative Bank should make an application to the Debt Recovery Tribunal established under the Act of 1993 and no Court or other authority have any jurisdiction, power or authority (except the Supreme Court and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution of India) to entertain and decide the matter.

(2.) The crucial question which calls for decision in this petition is whether the provisions of the Act of 1993 are applicable to a Co-operative bank established and registered under the Act of 1965 for recovering debts due to its members ?

(3.) In order to resolve the above controversy, it is necessary to notice the scheme and relevant provisions of the Act of 1965 and 1993. The Rajasthan Co-operative Societies Act, 1965 came to be enacted to consolidate and amend the law relating to co-operative societies in the State of Rajasthan as preamble of the Act manifests. The various provision contained in the Act also show that the Legislature was keen to provide that ordinarily the co-operative societies should not be dragged in Civil Courts and there should be comparatively a clean and speedy remedy for settlement of disputes. The Act and the Rules framed thereunder relating to settlement of disputes, provide a complete Code touching the constitution, management or business of a co-operative society arising amongst members, between a member and the society, between the society or its committee and employees and between the society and the surety of a member. Section 75 provides that all disputes touching constitution, management or the business of a co-operative society shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute. Chapter XII provides the modes of recovery of any debt or outstanding demand due to the society by any member, present or past or deceased, by sale of the property or any interest therein. The Registrar or any person empowered by him in this behalf, while exercising any power under the Act for the recovery of any amount by attachment of sale. etc. is a Civil Court for the purpose of Article 136 of the First Schedule to the Limitation Act. Chapter XIII deals with provisions of appeal, revision and review. The Rajasthan State Co-operative Tribunal is constituted under Section 123. A person to be qualified for appointment as the Presiding Officer of the Tribunal should be either a retired Judge of the High Court, a District Judge present or retired, or a Registrar of Co-operative Society having served as such for not less than three years in any State of India. Section 123 deals with constitution and appeals to the Tribunal. Section 124 provides appeals to other authority against certain orders mentioned in the Section. Sections 125. 126, 128 and 136 contain provision for revision, review and other power of superintendence. Then, Section 137 contains a statutory bar of jurisdiction of Courts, Thus, the Act of 1965, and the Rules of 1966 framed under the Act, besides other matters contain a complete Code and mechanism for settlement of disputes between the society and a member and a complete machinery is provided for the recovery of any amount of debts due to a co-operative society by its members.