The Rajpura Janta Cooperative v. Smt. Maya Devi & Othrs

Shri Deepankur Sharma, Advocate, for the appellant. MUKUL MUDGAL, C.J. (Oral) *** In this appeal, the appellant has challenged order dated

21.9.2010 passed by the learned Single Judge of this Court, whereby the petition filed by the petitioner (respondent herein) was disposed of upholding the finding of the Revisional Authority that the petitioner can initiate the arbitration proceedings before the Assistant Registrar, Cooperative Societies, Rajpura with a direction that since, the petitioner was deprived of the opportunity to pay the entire loan amount on 21.6.1996, he shall not be liable to pay interest thereon to be determined by the Arbitrator with effect from 21.6.1996 and further ordering that once the petitioner satisfied the award (Annexure LPA No. 1734 of 2010 [2] P-2 annexed with the writ petition) made by respondent No.3, the title deed shall be released to him.

2. The case set up by the writ petitioner before the learned Single Judge was that he being the member of The Rajpura Janta Cooperative House Building Society Ltd. Rajpura (hereinafter referred to as the Society), had taken loan in the year 1988 to the tune of Rs. One lac which was to be returned by him in eighty installments spread over a period of 20 years. . At the time of grant of loan, the appellant society had kept with it the sale deed of the plot of the petitioner as a collateral security. It was pleaded in the petition that during the period from 27.9.1989 to 12.4.1996, he had returned the loan amount to the tune of Rs. 94,239/- i.e. the entire principal amount to the Society (appellant herein) but the society refused to return the sale-deed kept by it as collateral security. There existed some dispute with regard to the outstanding amount, therefore, arbitration proceedings under Section 55/56 of the Cooperative Society Act, 1961 (hereinafter referred to as 'the Act') were initiated by the society in the Court of Assistant Registrar, Cooperative Society, Punjab , which were decided on 30.6.1994. Feeling dissatisfied by the award of the Assistant Registrar, the loanee Bhagwan Dass filed a revision petition No.348 of 1994 in the court of Joint Secretary (Appeals) Cooperative Department, Punjab, wherein the matter was remanded to the Assistant Registrar on

13.11.1994. On remand the matter again came up before the Assistant Registrar for deciding the same afresh. The claim raised in those proceedings was for a recovery of Rs. 1,39,872/-. No body on behalf LPA No. 1734 of 2010 [3] of the society appeared on 10 dates fixed in the case by the Assistant Registrar and on 21.6.1996, one Gurcharan Singh, Field Worker, appeared but did not produce the record. He also informed in writing and orally to the Assistant Registrar that the account of Bhagwan Dass was untraceable so he could not tell how much amount was due against the loanee but admitted that loanee had deposited a sum of Rs.50,000/-. The Assistant Registrar, Cooperative Society, Patiala, on that very day i.e. 21.6.1996 ordered the case to be filed.

3. Feeling dissatisfied by the order passed by the Assistant Registrar, the writ petitioner through his attorney filed an appeal under Section 68 of the Act before the Deputy Registrar, Co-operative Societies, Patiala on the ground that Joint Secretary ( Appeals) had remanded the matter to the Assistant Registrar for re-deciding the earlier case only and did not give him any right to decide any new case. The Deputy Registrar dismissed the appeal holding that the Society would have the right to present the record, complete the record and present the total amount due from the loanee. However, thereafter no steps were taken by the Society in the matter. The writ petitioner served legal notice dated 26.12.2205 for return of document i.e. sale deed . The Society sent the reply to the said notice (Annexure P-4A) stating that an amount of Rs.5,88,309/- was recoverable from the writ petitioner as on 31.12.2005,therefore, sale deed of the mortgaged property could not be returned. Feeling dis- satisfied by the reply, writ petitioner filed a revision petition under section 69 of the Act before the Additional Registrar (G) Cooperative Societies, Punjab for directions to the society to return the said sale LPA No. 1734 of 2010 [4] deed. The said revision petition was dismissed by the Additional Registrar holding that the same was not maintainable. Aggrieved by the inaction on the part of the society and also the order passed by the Additional Registar, Bhagwan Dass loanee filed civil writ petition No. 17493 of 2007 in this court, which was disposed of by the learned Single Judge on September 2,2010 recording a finding that the writ petitioner can initiate the arbitration proceedings before the Assistant Registrar,but he shall not be liable to pay interest on loan amount to be determined by the Assistant Registrar w.e.f. 21.6.1996 and on satisfaction of the award the sale deed in question shall be returned to the writ petitioner.

4. Against the order passed by the learned Single Judge, the respondent has filed the instant appeal.

5. Learned counsel appearing for the appellant contended that the order passed by the learned Single Judge restricting the calculation of interest on the loan amount only up to 21.06.1996 is erroneous because such a restriction could not be imposed once it is found that the loan amount is still due against the loanee-Bhagwan Dass. To substantiate this argument, he harped upon the findings recorded by the Assistant Registrar Cooperative Societies that though the writ petitioner offered to pay the loan amount but he refused to sign the statement. On the basis of this finding alone, the learned counsel urged that because of the aforesaid conduct of the writ petitioner, the concession ought to have not been granted by the learned Single Judge.

6. We do not agree with the argument advanced by learned LPA No. 1734 of 2010 [5] counsel for the appellant. We find that this is a clear case of abuse of the judicial process. A party under the garb of court proceedings is trying to pass on the buck of its inaction to penalize a gullible person. The plea urged by the learned counsel for the appellant is not acceptable because the writ petitioner had offered to pay the loan and made a statement to that effect before the Arbitrator, who recorded his findings to the following effect:- “ From Second Party, his father Shri Sawan Ram came present and to fight a case from his son side, he gave Power of Attorney on 4.3.1996 which was put on record. Shri Sawan Ram stated that he deposited Rs. 58847/- ( Rs. Fifty Eight Thousand Eight hundred and forty seven only) to Secretary Cooperation and rest of the installments which were due should be told land he is ready to deposit those installments. But he refused to sign the statement. According to the above mentioned till the time first party will not tell the claim in real sense and would not present the relevant account, it is impossible to go head in the case. So this case is filed. That the first party will have the right to present the record and complete the record and can present the total amount of the arbitration case.” The mere refusal to sign the statement cannot be taken as a ground for setting aside the impugned order because from 1996 onwards when the proceedings were ordered to be filed by the Assistant Registrar on account of non production of record, no action has been taken by the appellant to produce the record before the Arbitrator for determination of the loan amount due from the writ petitioners. Even the official who had appeared before the Assistant Registrar in those arbitration proceedings stated that since the record was not traceable therefrom he could not tell how much amount was LPA No. 1734 of 2010 [6] due from the writ petitioner, but at the same time, he admitted that the writ petitioner had already deposited a sum of Rs. 50,000/- on

12.4.1996. The statement made by the writ petitioner before the Assistant Registrar and admission by the official of the society that the writ petitioner had deposited Rs. 50000/-, though as per case of the writ petitioner he had deposited Rs. 94,239/-, clearly indicates that writ petitioner was always ready and willing to pay the amount and his statement made before the Assistant Registrar though not signed could not be disbelieved. Even the Additional Registrar(G), Cooperative Societies, Punjab before whom the writ petitioner had filed a revision petition for direction to return his sale deed had criticized the inaction on the part of the appellant by recording the following findings:- “ xxx xxx xxx The Society failed to produce the relevant record as a consequence of which the arbitrator has to close the proceedings. The petitioner has suffered unnecessarily for want of action by the staff of the society who have failed to produce the relevant record. The attitude of the staff relating to recovery is also apparent from the fact that the arbitration proceeding which were closed in 1996 with the direction for reopening after the tracing of the record were not reopened as the staff failed to produce the relevant record. The petitioner has been unnecessarily burdened with interest for a long period. xxxx” The findings recorded by the authorities aforementioned clearly prove that it is a case of sheer inaction on the part of the appellant who failed to initiate arbitration proceedings again in pursuance of the order passed by the Assistant Registrar on 21.6.1996 for recovery of LPA No. 1734 of 2010 [7] the amount, if any, due from the writ petitioner. The inaction on the part of the appellant is highly deplorable and we deprecate the same and cannot leave the petitioner to be burdened with the amount of interest after 21.6.1996. We find that the learned Single Judge has rightly held that the appellant cannot claim interest from the writ petitioner after 21.6.1996 on which date the arbitration proceedings were ordered to be filed because of non production of record. In fact had the respondents-writ petitioner approached this court that part of the order which permitted restart of arbitration proceedings could be faulted.

8. No other argument was raised. Accordingly, the appeal is dismissed in limine with assessed as Rs.20,000/- which would be paid to the respondents-writ petitioners by way of Bank Draft, within a period of four weeks from today and an affidavit to that effect shall be filed in this Court by the appellant. In case the affidavit is not filed regarding payment of the amount of Rs. 20,000/- to the respondents, the Registrar General of this Court shall initiate recovery proceedings against the appellant so as to ensure that the amount is recovered from the appellant and paid to the respondents-writ petitioners. (Mukul Mudgal) Chief Justice December 17, 2010 Malik (Ranjan Gogoi) Judge