WASANT SHRIPAT DESHPANDE Vs. G. M. KHANDEKAR

JUDGEMENT

(1.) THIS appeal arises out of civil Suit No. 1.A of 1938 filed by the two brothers Shripat Rao (who died during the pendency of this appeal, leaving appellants 1 (a) to 1 (d) as his successors) and Waman Rao, sons of Balaji Deshpande, for a declaration that the contributory order, dated 7th March 1935 for payment of Rs. 12,000 with interest passed against them by the liquidator (defendant 1 in this litigation) was null and void and also for a declaration that their names as members of the Co-operative Credit Society No. 44 of Dhaba (to which for the sake of lucidity, we shall hereafter refer as the society) be deleted from its register. These two brothers' had borrowed various amounts from time to time from the society and had executed a mortgage, dated 21st February 1920, for Rs. 12,000 in favour of the society by which 16 fields of Dhaba in the Yeotmal district in Berar were hypothecated.

(2.) THE society was indebted to the Co. operative Central Bank, Limited, Yeotmal, (defendant 2 in this litigation) and the Registrar had passed an award for Rs. 26,639 11.3 on 9th October 1922, (exhibit 2 D-1) against the society, consisting of 22 members including the two plaintiffs. In execution of the said award some fields belonging to the plaintiffs were attached by the civil Court and the execution proceedings were transferred to the Collector for sale of the property. In the meantime the society went into liquidation on 21st July 1934, and further execution proceedings by the decree-holder (defendant 2) against the judgment-debtor, the society, were dropped. Defendant 1 was then appointed as liquidator and on 7th March 1935 he passed the contributory order against the plaintiffs as stated above. When the contributory order was being executed in the civil Court the plaintiffs objected to its execution on the ground that inasmuch as the mortgage debt for the payment of which the contributory order was passed had been fully satisfied on 10th December 1929 long before the making of the contributory order of 1935, the said order was null and void. The objection having been disallowed the plaintiffs preferred an appeal to this Court which passed an order directing the execution proceedings to be stayed so as to enable them to file a civil suit and get the points in dispute settled therein. Hence the plaintiffs filed this suit for a declaration.

(3.) THE lower Court found that the contributory order of 1935 was wrong inasmuch as the mortgage debt in respect of which it was passed had been satisfied on 10th December 1929, but it was held that the said order could not be regarded as ultra vires, even though it might be wrong, and that the plaintiffs' suit for a declaration was barred by the provisions of Section 42(6) of the Act. It was also found that the Suit was not tenable as the plaintiffs bad not given to the liquidator the notice prescribed by Section 80, Civil P.C. On these findings the lower Court dismissed the plaintiffs' suit.