The High Court · 2025

Petition under section 151 of c-p-c., praying that in the circumstances stated in the affidavit filed in support of the petition, the High cou( may be preased to stay a further proceedings in c o.S No. 18 of 2024, on the fire Additionar specrar court in the cadre of District Judge for Triar and Disposar of commerciar Disputes, city civir court, at Hyderabad. Counsel for the Petitioners :SRl. DAMODAR MUNORA Counsel for the Respondents : SRI B. VAMSHIDHAR REDDY The Court made the following : ORDER THE HON'BLE JUSTICE MOUSHUMI BHATTACI{ARYA AND THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO CTVIL REVISION PETITION NO. 24L OF 20/25, ORDER: (per Honble Justice B.R.Madhusudhan Rao) This Civil Revision Petition is fited aggrieved by the order passed by the Additional Special Court in [he cadre of District Judge for Trial and Disposal of Commercial Disputcs at Hyderabad in I.A.No.157 of 2024 in COS.No. 18 of 2024, dated 12. 11.2024, wherein rhe application Iiled by the petitioner under order v Rule r r ol civit procedure code (CPC) was dismissed.

2.1 The contentions of the petirioners in I.A.No. 157 of 2024 (under order vll Rule 11 of cPC) is thar rcspondenr No- r /plaintilf filed suit for recovery of money and damagcs .igalnst the pctitioners for a sum of Rs.2,32,88,194 /- out o[ u,hich Rs. 1,12,t3,2:,:8/_ is the principal amount against the supply of material ro the petitioner No. 1/ society. Petitioner No.l is a Co-operative Society registered under the provisions of the Maharashtra Co-opera[ivc Societies Act, 1960 (hereinafter called as'the Act, 1960) uide registrarion No.SUR/ MDA/TRG(A)- 1S/ S I I I tgSg dated 26.04.1989 before thc Statc of Maharashtra. The petitioner No.I is run{ng a sugar factory and for the purposc of the business used to purchase gunny bags from thc respondent No.i. Earlier respondent ) No.1 used to supply gunny bags u,ith good quality wirh weightage of 16O 2l 13 MI],J&I]IiMR,. Clll' No.24l of 2025 grams however the supply that made by the respondent No.l was of inferior quaiity which weighed around 148 grams due to which disputes ai ose. The petitioners have raiseci contentions that piaint has to be rejected on the grounds of (i) non-compliance with the mandatory provisions of Section 12(A) of the Commercial Court Act, (ii) barred by limitation and (iii) iurisdiction of the civil court is barred undcr Section 91 read with Section 163 of the Act, 1960.

2.2. The plaint is barred under Article 24 of thc Limitalion Act, 1963 (herei.aftcr refcrred to as ,the Act, 1963,) and it is saLecl in rhe plaint that the last payment made by the petitioners is on I 4.1).2O1 g, (he suit is hopclessly barred. Respondent i.,lo.1 has earlicr r-ireci COS.No.44 oi 2O21 which w.as rejected by the Commercial Corrrr ulde orclcr dated

24.1O.2O23 as the respondent No.1 failed to complr issuancc of noticc under Section 164 of the Act, 1960. Respondent No. L is :r mr:mbe r o[ the society for making transaction of goods and macle compliance lor becoming "C" class member of the society. The dispurte is covcred under the busincss of society under Sections 91 and 163 ol Lhe Act, t960. Thc business of the societies shall be referred to the C. op(.rati'e Court and the Civil Court has no jurisdiction to try the samc artri pravcd to reject- the plaint as thc suit has been initiated without complr ing rtith thc pre institution mediation as it is barred by limitarron and lack of jurisdiction. / MB,J&BRMR,J CRP.No.24l ot 2025

3.1 Respondent No.t has filed counter and contended that earlier they have frled suit for recovery of money and damages uide COS.No.44 of 2027 before the Commercial Court and the petitioners have filed I.A.No.389 of 2022 under Order VII Rule 11 ol CPC seeking rejection of plaint as the respondent failed to give mandatory notice under Section 164 of the Act, 1960, the suit came to be rejected uide order dated

24.1O.2023. The suit in COS No.44 o[ 2O2t was rejected on technical and legal grounds. Respondent No. I has filed an application seeking permission of the Court to waive the pre-insti[ution mediation and settlement as mandated in Section 12(A) oi the Commercial CourLs Act, 2O 1 5 (hereinafter referred to as 'the Act, 20 1 5') and the Court was pleased to allow the application foregoing the pre limitation mediation between the parties on the ground of urgcnc,v.

3.2 Respondent No.1 has frled application undcr Order XXXVII I Rule 5 of CPC seeking to furnish security in rcspect of the suit claim in COS.No. 18 of 2024. Respondent No.1 has lau,fully obtained the leave of the Court. It is settled iaw that the Court only necds to look at the plaint and the documents filed along with the same and cannot look at the defence of the petitioners. The Apex Court in suo-motu Writ Petition (Civil) No.3 of 2O2O was pleased [o cxtcnd thc limitation period from 2O.O3.2O2O to O8.O3.202i due to Covid-19 pandemic despite the last payment made on l4.l2.2ola. The suit fiied by respondent No. 1 in COS.No.44 of 2021 was rejected uide order dated 24.10.2023 and, \a".\ 4 /rs 1"!9...r & ItRtltt - CRP No 24 I oI2025 therefore, the period from 2O2l till the issuance of noticc under Section 164 of the Act is excluded. The suit is protected by Sections 14 and (15)(2) of the Act, i953. The iimitation is a mixed quesrion of law and fact, therefore the same cannot be determined at this juncture. Rcspondent No. I never became .C, class member of the socicty or has signed any documents. Dispute is not covered under Sections 9l and 163 o[ the Acr. 196O.

4. Thc Trial Court after going through the record hzrs dismisscd the application filed by the petitioners under Order VII Rule I i (l.A.No_ 157 of 20241 on 12.11.2o24 hording that Sections 9I ancl i63 of rhc Act, 196a atc ,ot applicable and further held ttrat limitation is:r mixed question of fact and law and the same has to be decided in a lull fledged tria L

5. Learnecl counscl for the petitioners submrts that suil is l.rit br Scction 91(c) reacl with Sections 45 and 163(l)(b) oI tlLc Act. 1960. Respondent No 1 snrrendered themselves to the jurisdiction o[ tl,r: Act, i960, by not preferring any appeal against the ordr:r passed in COS.No.44 of 2021. On reading of Section 164 of the Act, 1960, norice shall bc addressed to the Registrar, shall state the cause o[ action, details of the plaintiffs,, relief oi the piaintiffs. In the evcnt the Court comes Lo a conclusion that the respondent No. I does not fall under Section 9l(c) R/W Sections 45, 163(l)(b) of the Act, 196O. even rhcn rhe respogdent i'lo. i has otherwise fa eci to comply with tl-rc correct format -."- s/ i3 MB,J&BRMR,J CRP.No.24l of 2025 of the notice under Section 164 ol the Act, 1960. Learned counsel to substantiate her contention has relied on the decisions in the case of (i). Margret Almeida and Ors. vs. The Bombay Catholic Co operative Housing Societ5z Ltd. and OrsI, (ii). yakub Abdul Razak Memon vs. State of Maharashtra2.

6. Learned counsel for respondent No.1 submits that the petitioners have challenged the jurisdiction of a Civil Court as per the Act, 1960. The petitioners have restricted their grounds in thc cRp that Sections 91 and i63 of the Act, 1960 will be applicabte to the facts and circumsLances of the commercial suit. Respondent No. I has filed the civil suit for recovery of money for the amounts not paid for the goods supplied i.e., gunny bags. Section 2 I of the Commercial Court Act, 2O 1.5 has a notwithstanding provision. The suit is pending before the Commercial Court at Hyderabad rvhich falls u,ithin the definition of Section 2(l)(c)(xviii) of the Act, 2Ol5 i.e., agreements for sale of goods or provision of services as the value of the suit is above one crore. The Commercial Court has jurisdiction to try thc suit but not the co- operati'e Tribunal or any other court on account of notwithstanding provision mentioned in Section 2 I of the Act, 20 15 and on account of Scction 6. Section 45 of the Act, 196O deals with disputes rclating to loans and borrowings and does not cover other disputes much less a dispute with respect to recovery of money lor goods supplied between

1.-. I Monu/5C/0068/t 2 r (2or3l 13 scc I 6l t3 ]\,1Il,J&BRI\,IR,J (lRP. No.241 of 2025 the society and non member. Counsel relied on thc decisions reported in (i), Gujarat State Civil Supplies Corporation Limited vs. Mahakali Foods Private Limited (Unit 2) and Anothers, (ii). Alexander Luke vs. Aditya Birla Money Ltd.,a and (iii). Usha Sunder premises Co_operative Society Ltd. vs. Nilang Desai and Others.s 7, [,e arned counscls on record have filed their respectivc written submissions supporting thcir contentions

8. \r.re have heard learned counsel appearing for the parties and have gone through the rnatcrial on record, the only question falls for our considcration is r.r,hcthcr Lhe order passed by the trial court sulfers from a ny pcrver-sit3 ,._r r i!legalit; .

9. Firstly ler us see thc definition of member in the Act, 1960. Section 2(19)(a) of thc Act, 1960 says member means:r person joining rcgistration of a Co-opcrative Society which is subsequently regisLcrcd, or a person dulv admitred to membership of a society after registration and includes a nomrnal, associate or sympathizer member. Sul>_clause (b) deal-" with associate member rvho holds a share of society r,r'itir others, sub- clause (c) deals with nominal member rvho is admitted to membership as such after registration in accordance u,ith the by_lau,s, sub-section (d) dcals i'ith sympathizer member who sympathises rvith 3 lQzal r scc ror { 2Oa SCC O.r,ne Ker /e/ 5 :otlscc onr,.. so- sr: Tlrs MB,J&BRMR,J CRP.No.24l of 2025 the aims and objects of the society and who is admitted by the society as such me mber.

10. It is to be noted here that respondent No. t has earlier hled COS.No.44 of 2O2l against the petitioners for recovery of Rs.1,90,4 I,694/- together with interest at the rate of lg%o perannum in respect of the material supplied. The petitioners after their appearance filed an application in IA No.389 of 2022 under Order VII Rule I I read with Section 151 of CPC to reject the plaint contending that the ciisputes bctwecn the members of the society is covered under Section 91 of the Act, 1960 and the dispute is required to be rcferred to Co-operative Court at Solapur and the suit in the present form is not maintainable in view of Section 163 of the Act 1960, if rhere is any disputes u,ith regard to the business of the society the same needs to be intimated to the Registrar of the Societies in view of Section 164 of Act,

1960. Respondent No.l filed his counter in IA.No.389 ot 2022 and contested the same. The Commercial Court uide order dated 04. IO.2023 has rejectcd the plaint in COS.No.44 of 2O2l under Order Vll Rulc I 1(d) of CPC hotding that notice under Section 164 ol the Acr, 1960 is mandatory in nature. 1 I . I Respondent No. 1 after rejection of COS.No.44 ot 2021 in IA No.389 of 2022 uide ord.er dated 04.10.2O23 got issued a legal notice on I I .O | .2024 to the petitioners by marking a copy to the Registrar, Maharashtra Statc Co-operative Sugar Factories Federation Limited. 1- 1'' 8/ Ls MB,J&BRMR,- CRP.No.241 of2025 Maharashtra and apart from others, thereafter fileC COS.No.7g of 2024 for recovery of amount against the petitioners and others, for an amount of Rs.2,32,88,794 i- together with interest at the rate of 1g% per annum from thc date of filing the suit titt the date of realization. It is mentioned in the plaint (coS-No. rg of 20241 that in order to rule out any ambiguit.y, again issued a legal notice dated ll .Ol .2024 to defendants hcrein and others concerned Government ofhcials in consonance with the requirement under Section 164 of the Act, 196O calling upon thc defendant No.1 to make payment ol Rs.2,29,5 6,405 l_ for the goods sr-rpplicd by rhc plair-rtiff therein within a period of 15 days o[ receipt of thc noticc ancl copv of the same is also served on the other defenciants. Petitioner No.I here in / defcn dant No. 1 in the suit gave a reply on 26.O2.2024 raising false and baseless allegations.

11.2. lt is further mcntioned in the plaint that contract betu,een the parties comes under commercial disputes under Section 2(1)(c)(i), section 2(1)(c)(xviii) of rhe Act, 2o15 and the suit filed by them is wirhin the period of limitation, suit is protected under Sections 14, 15(2) of the Act, 1963.

72. Section 45 of the Act, 1960 deals with restrictions on other transactions with non irre.rtber st thc Lransactions oi the society with persons other than members shall be subject to such restrictions underlying if any as may be prescribed. Section 91 of the Act, 1960 deaisrv-ith disprrres, sub ciause (i)(cl says thal a person other than a 1 -z' MB,J&E}RMR,J CRP.No.24I ot 2025 member of the society, with whom the societ5r has any transactions in respects of which any restrictions or regulations have been imposed, made or prescribed under Sections 43, 44 or 45, and any person claiming through such person. Section 163 deals with bar of jurisdiction oI Courts, sub-clause(1)(b) says any dispute required to be referred to the co operative society for decision.

13. Section 2 of the Act, 2015 deals with definitions, relevant definition is Section 2( I )(c)(xviii) deals with agreements for sale of goods or provision of services. Section 6 of the Act, 2O15 deals with the jurisdiction of Commercial Courts which has jurisdiction to try all suits and applications relating to commercial disputes of a specihed value arising out of the entire [erritory of the state over which it has been vested territorial jurisdiction. Section 2l of the Act, 2015 deals u,ith overriding effec t.

14. RespondenL No. I has filed COS.No.78 of 2024 on 18.03.2O24 for recovery of Rs.2,32,88,194 /- towards supplying of material to the petitioners' society along with future interest at the rate of ISoh per annum. The point raised by the petitioner counsel is that suit is barred by limitation and the jurisdiction of Civil Court is barred under Scction 9 I read with Section 163 of the Act, 196O and further submits that as per thc pleadings in the plaint last payment is made on 14.12.20I8. IL is averred in the plaint that the petitioners have made their last payment on l4.I2.20la. It is further averred in the plaint that \-*"-" MB,J&BRi!{R,- cRP. No.241 .)f2025 COS.No.44 of 2O2l is fited in the year 2O2l and the same was rejected on 24.IO.2O23 for non-compliance of notice under Sectjon 164 of the Act, i96O. Responcient No.l has got issued legal notice on 17.O1.2O24 in compliance with section 164 of the Act, 196o and thereafter suit in COS.No. 18 of 2024 is filed on 1g.O3.2O24 and they are protected under Sections 14 and tS (2) of rhe Acr, i963. 15' The Suprcme court in suo motu writ petition No. 3 of 2o2o extended the limitation period from 20.03.2020 to 0u.o3.2021 due to Covid-19 pandemic. Irr vicw of the same COS.No.44 of 2O2l is filed by the respondent No.1. From 0g.03.202 I till issuance ol notice dated 11.01.2024 is protecred under Sections l4 and lS(2) of the Act, 1963. As rightly obser-ved by the trial court rhat the limit.tion is a mixed quesLion of fact and lau, and rhc same has to bc adi udicated in a full trial, it cannot be decided in the application hlcd under Order VII Rule 11ofCPC.

16. 1. In Margaret .a.lmeida casc, (supra) the Supreme Court observecl at paragraph No.22 which reads as under: "22. Section 9l also stipulates that thc disputes which are mandatorily required to referrcd to the Co operative Cotrrt for adjudication must also be disputes arising bctween the parties to the dispLrte rvho shoulcl belong to one or the other categorics specificd under clauses (a) to (e) to Sub_section (1), hereinafter referred to as ,enumerated persons,, for the sake of convenience. It can be seen from the schemc of Section gl, to confer exclusive jurisdiction on the Co-operative Court, the drspute must satisfy two requirements. It was held so in Marine Times Pubticaticns (p) l_td. .,.. Shriraii:, Ti-anspoft and Finance Corrrpagy Ltd. M^NU/SC/Ot6l/1991 : (1991) I SCC 469 at Dara I l: / tr/rs MB,J&BRMR,J CRP.No.24 I of 2O25

11. Before a dispute can be referred to a Cooperative Court under the provisions of Section 91(1) of the said Act it is not only essential that the dispute should be of a kind described in Sub-section (l) of Section 9l but it is also essential that the partics to the said dispute must belong to arry of the categories specif,ied in Clauses (a) to (e) of Sub_section (l) of the said section. Both the subject matter as well as the parties to the dispute must be those specified under the section. [n other words, if either of the above mentioned two requirements is not satisfied then the dispute cannot be adjudicated by the Co_ operative Court. [f one of the parties to the dispute is not an enumerated person, the question whether the subject-matter of the dispute is one which falls exclusively within the jurisdiction of the Co_operative Court need not be examined. Similarly, if it is iound in a given case that the subject_matter of the dispute is not covered b1, Section 91, an enquiry into the question whether the parties to thc dispute [all undcr anv of the categories enumerated under Section 91 would become irrclcvan t. "

16.2. It is important to note here lhat the Supreme Court in Margaret Almeida (supra) has also discussed about Section 9l(1)(c) of the Act, 1960 at Paragraph No.29 rvhich reads as under: "29. Therefore, where Section 9l(l)(c) speaks of persons other than the members of the society, it is actuatly referring to persons other than the members or the societ.\'rvl.ro have deposited money with the society or who have either lent or borro*.ed monc,r, from the society in accordance with the provisions of Sections 43 and 44 and subject to the conditions and limitations if any prescribed with reference to such lendtng to or borrowing from the society."

17. In Yakub Abdul Razak Mcmon2 (supra) the Supreme Court has held that the principal that the later Act would prevail over the earlier Act has consistently been held to be subject to exception that a general provision does not derogatc from a special one. 1 ) 12l t3 iriB, .J & BP.]\{R, J CRP.No 24 t of 2025

18. In Gujarat State Civil Supplies Corporation Limited: (supra) the Supreme Court Held that the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 being an enactment later to that of the Arbitration and Conciliation Act, 1996, shall have an overriding effect over the provisions o[ the Arbitration Act, 1996, similar view is taken by the Division Bench of the Kcrala High Court in Alexander Lukea supra.

19. In Usha Sunder Prernises Co-opcrative Socicty [,td.5 case (supra), the issue fell for consideration bciorc the Bombav High Court is with regard to the bar of inherent jurisdiction of thc Court under Section 9i of the Act, 1960, wherein it is held that the dispures relates to the management and business of the plaintiffs societv ancl is in between the socie$r, its members and the pcrsons o[hcr thzrn its proposed members be covered under Scction 9l , it musr bc adjuclicatect in the Co-operative Tribunal is incorrcct. The Civil Courrs jurisdiction is not seem to be barred.

20. The Maharashtra Co-operative SocieLies Act is ol the year 1960, The Commercial Courts Act is of the ycar 2O l5 u'hich has an overriding effect under Section 21 of the Act, 20lS, further morc respondent No. 1 is not a member of the Society anci it cannot be sard that Commercial Court has no jurisdiction to try the suit. The pe[itioners, failed to show before ttre trial Court what erre thc restrictions u.hich have been prescrlbeci under the provisrons of the Act, l96O so t.h.rt thc Commercial 13/ r3 MB,J&BRMR,J CRP.No.24l of 2O25 Court has no jurisdiction to try the case- The filing of the suit by the respondent in COS.No.18 of 2024 does not fall in any of the provisions under Section 9i(1)(c) R/W Section 45 and Section 163 (1) (b) of the Act, 1960.

21. The trial Court has properly appreciated the facts of the case and rightly dismissed thc application field by the petitioners under Order VII Rule 11(d) of CPC, l9O8 and rightly observed that the limitation is a mixed question of fact and law, u,[-rich l-ras to be decided in full fledged trial. We are of the considercd view that lhe trail Court has rightly observed in its order that the pctitioncrs have not made out any case for rejection of plaint in COS.No. 18 ot 2024.

22. We are not inclined to intcrfere with the orders of the trial Court and we do not find any perversity or illcgality in the impugned order.

23. CRP.No.24 I of 2025 is dismisscd. There shall be no order as to costs. Pending miscellaneous applications, if any, shall stand closed. SD/- A.SREENIVASA REDOY ASSISTANT REGISTRAR /, //TRUE COPY// SESffi orr,"=* One Fair Copy to the Hon'ble Justice Moushumi Bhatacharya (For Her LadYshiPs Kind Perusal) One Fair Copy to the Hon'ble Sri Justice B.R.Madhusudhana Rao (For His LordshiPs Kind Perusal) To, The Additional Special Court in the Cadre of Distfict Judge for Trial and Disposal of Commercial Dispi-rtes, City civil Court, Hyderabad. 2 11 LR Copies 3- The Under Secretary, Union of lndia Ministry of law, Justice and Company Affairs, New Delhi. \

4. The Secretary Telangana Advocates Association, Library, High Court Buildings , Hyderabad

5. One CC to SRl. DAMODAR MUNDRA ,Advocate [OPUCI 6. One CC to SRl. B VAMSHIDHAR REDDY, Advocate [OPUC] 7. Two CD Copies Pcsd/gh t6, HIGH COURT DATED:16/02U2025 ) ORDER CRP,No.241 ot 2O2S ,, '')\ ) (?r (' 2g JUt 2$6 /,.,-...-^ f.i ( 'it t I DISMISSING THE CIVIL REVISION PETITION co@ a\ ft"r,