PANNA LAL Vs. COLLECTOR OF MEERUT

JUDGEMENT

(1.) The applicant, Panna Lal, had a decree for money against Hansa and Faqira. He executed that decree in the Court of Munsif of Meerut and prayed for attachment and sale of certain crops belonging to Hansa and Faqira. The attachment was made on 16 March 1937, and the sale took place on 8 April 1937. Panna Lal set off the sale price against the amount due under his decree and filed a receipt in Court stating that his decree had been discharged. On 28th May 1937, a letter was received by the learned Munsif from the Collector requesting that Panna Lal should be called upon to pay the amount for which he had purchased the crops of Hansa and Paqira to the Collector. It transpired that Hansa and Faqira were members of the Murlipur Co-operative Society, that the District Co-operative Bank of Meerut had advanced loans to the Murlipur Co- operative Society and had obtained an award against the Murlipur Co-operative Society in respect of those advances. The award provided that every member of the Murlii pur Co-operative Society would be liable for the debt that was due from the Murlipur Co-operative Society to the District Co-operative Bank of Meerut. It further transpired that under Rule 137(1) of the Co-operative Societies Rules a requisition had been sent to the Collector for the recovery of the amounts due to the District Co-operative Bank under the award. This sub-rule provides that on receipt of such a requisition the Collector can recover the money as if it were an arrear of land revenue. Having received this requisition, the Collector proceeded against Hansa and Faqira on the ground that they, as members of the Murlipur Co- operative Society, were liable for the debt due to the District Co-operative Bank from the Murlipur Co-operative Society, and purported to make an attachment on 2 April, 1937, of those very crops which had already been attached by the Civil Court in execution of Panna Lal's decree. It was because of the receipt of the requisition and because of the attachment that he had purported to make on 2nd April 1937, that the Collector sent the letter, mentioned above, to the Civil Court on 28 May 1937. The learned Munsif has in a short order held that the District Co-operative Bank is entitled to priority over Panna Lal and has directed Panna Lal to refund the sale proceeds. It is against this order that this petition in revision is directed. It seems to us that the order of the learned Munsif is unsustainable. Learned counsel appearing for the respondent has referred to Section 19, Co- operative Societies Act (No. 2 of 1912). But that Section, in our opinion, has no application to the facts of the present case. The Section lays down that, subject to certain prior claims, a registered Society shall be entitled to priority to other creditors to enforce any outstanding demand due to the society from a member or past member, (a) in respect of the supply of seed or manure or of the loan of money for the purchase of seed or manure....; (b) in respect of the supply of cattle, fodder for cattle, agricultural or industrial implements or machinery, or raw materials for manufacture or of the loan of money for the purchase of any of the foregoing things....

(2.) Now, firstly, in the case before us there is no outstanding demand due to a Society from a member or past member. This is a case which is concerned with money being due to the District Co-operative Bank from the Murlipur Co-operative Society on account of loans having been advanced by the former to the latter. Secondly, the conditions laid down in clauses (a) and (b) of the Section are not present. No such allegation was made in the Court below and there is absolutely no evidence on the point. Section 19, therefore, cannot apply. The next argument advanced is that as the Collector is required to recover the money due to the District Co-operative Bank, under the award as if it were an arrear of land revenue, the District Co-operative Bank is entitled to priority over Panna Lal and is entitled to get an order from the Civil Court calling upon Panna Lal to pay back the money which he has realised by sale of the crops. In our opinion this argument too is without force. All that Rule 137(1) lays down is that the Collector can adopt the same methods for the realisation of the money as he can adopt for the recovery of an arrear of revenue; in other words, that he can adopt such of the processes laid down in Section 146, U.P. Land Revenue Act, as may be applicable. In our opinion, this does not invest the debt due to the District Co-operative Bank with the character of land revenue due to the Crown. It merely provides a summary procedure for the realisation of the money. The method or procedure which can be adopted for the recovery of the money is one thing, and the substantive right of priority is another. Learned counsel appearing for the respondent next cited Section 233(m), U.P. Land Revenue Act. The relevant portion of that Section runs thus: No person shall institute any suit or other proceeding in the Civil Courts with respect to...claims connected with, or arising out of...any process enforced...on account of any sum which is...realisable as revenue.

(3.) Panna Lal, however has not instituted any suit or other proceeding in the Civil Court. He has not done anything which can be said to come within the bar laid down in the Section. In our opinion this Section has no application whatsoever to the facts of the case before us. The last argument advanced on behalf of the respondent is that the District Co-operative Bank is entitled to rateable distribution and that the Collector must be taken to have asked for rateable distribution by his letter of 28 May 1937, and reference is made to Section 73, Civil P.C. We cannot accept this argument. None of the conditions laid down in Section 73, Civil P.C., is present in this case. No assets were held by the Court below. No application had been made to that Court for the execution of a decree either by the District Co- operative Bank or by the Collector. This argument also therefore fails. For the reasons given above we allow this petition in revision and set aside the order of the learned Munsif dated 26 July 1937. The applicant, Panna Lal, will have his costs throughout.