P.R. Gokulakrishnan, C.J.@mdashThis Letters Patent Appeal is against the order passed by the learned single Judge in Spl. C.A. No. 2776 of 1988. The appellant herein came forward with this application to issue an appropriate writ in order to quash and set aside the orders passed below Exhs. 9 and 10 by the Co-operative Registrar''s nominee in Lavad Case No. 817 of 1988, which was ultimately confirmed by the Co-operative Tribunal in Revision Application No. 60 of 1988.
2. The learned single Judge has dismissed the said Special Civil Application and has also refused to grant stay in order to enable the appellant herein to prefer an appeal before this Court.
3. In order to appreciate the contentions raised before this Court by the learned Counsel Mr. F.A. Memon for the purpose of admission of the Letters Patent Appeal, we have to refer to certain facts.
4. The appellant herein is a partner in the 2nd respondent-firm. The 2nd respondent-firm applied for a loan to the 1st respondent herein, amounting to Rs. 9,70,000/- to run a cycle stand. It is stated that such a loan was sanctioned by the 1st respondent in the name of the appellant, since it was the appellant who applied for the loan. But the facts reveal that such a loan was sanctioned by the 1st respondent for the purpose of the 2nd respondent-firm in order to enable its partner, who is the appellant herein to get the licence for running the cycle stand at the Kalupur Railway Station at Ahmedabad. The necessary deposit was made by the appellant in order to get the licence and the licence was granted, to be effective from 1-9-1987 to 31-8-1990. It is the case of the appellant that he borrowed the said sum of Rs 9,70,000/- from the 2nd respondent and has also paid to one of its partners various sums, amounting to more than Rs. 2,00,000/-, The 1st respondent herein invoked the jurisdiction of the authorities concerned under the Gujarat Co-operative Societies Act, 1961 and a suit was filed before the Registrar''s Nominee as provided under the Act. It is for the realisation of the amount of loan advanced by the 1st respondent to the 2nd respondent. In the said suit, two prayers were asked for under Exh. 9 and under Exh. 10. Under Exh. 9, the 2nd respondent wanted to take possession of the cycle stand and the Registrar''s Nominee granted the same on 21-4-1988, stating that such possession will be taken from 21-4-1988 up till 30-5-1988. In respect of the prayer, which is Exh. 10, the Registrar''s Nominee appointed Branch Manager of the 1st respondent-Bank as Receiver and such an order was passed on 21-4-1988 itself.
5. Mr. Memon, the learned Counsel appearing for the appellant, fairly states that he is not agitating in regard to the order passed under Exh. 9 since it has lapsed already and he is concerned only with regard to the order passed under Exh. 10. As regards the order appointing Receiver under Exh 10, the matter was taken up by way of a revision before the Tribunal. Pending the revision application a stay application of the said order was given by the appellant herein. On 17-5-1988, the Tribunal granted the stay. On 18-5-1988, the Tribunal also directed that the stay is on a condition that the appellant deposits a sum of Rs. 1.000/- every day. On 27-5-1988, the Tribunal heard the interim application finally and vacated the order of stay on the same day itself. Hence, the appellant moved the High Court by filing Spl. C.A. No. 2776 of 1988 and got an interim stay on the same condition imposed by the Tribunal originally. This was obtained on 2-6-1988. Subsequently, the Special Civil Application came to be heard by a learned single Judge of our High Court on 15-6-1988 and the same has been dismissed. It is as against this order, the present Letters Patent Appeal has been filed.
6. Mr. Memon, the learned Counsel appearing for the appellant, contended that the loan was obtained by the partnership firm while the licence was obtained by the appellant in his individual capacity. Further, the licence was operative from 1-9-1987, while the power-of-attorney, which is the basis on which the learned Judge dismissed the Special Civil Application was executed on 31-8-1987 and as such, such power-of-attorney cannot have any effect. It is stated by Mr. Memon that on the date of execution of the said power-of-attorney, there was absolutely no licence either in favour of the appellant or in favour of the firm, of which the appellant is a partner.
7. The next contention raised by Mr. Memon is that the Registrar''s Nominee has no power to appoint a Receiver since all the powers he derives is only u/s 100 of the Gujarat Co-operative Societies Act.
8. The next contention of the learned Counsel is that the learned single Judge, while passing the order in question, has not properly noted the facts of the case inasmuch as he has stated that the date of the power-of-attorney is 31-3-1988 while its date is 31-8-1987 and that the licence expires in August, 1988, while actually it expires on 31-8-1990, and the order was passed without application of mind. Mr. Memon further contended that by appointing the Receiver, the appellant is deprived of his livelihood and as such, it offends Article 21 of the Constitution. It is further stated by Mr. Memon that there is no relationship between the appellant and the Cooperative Bank for the purpose of invoking the jurisdiction u/s 96 of the Gujarat Co-operative Societies Act.
9. It is seen from the irrevocable power-of-attorney executed by the 2nd respondent, of which the appellant is a partner, a specific mention has been made that the loan was received from the 1st respondent-Bank to the tune of Rs. 9,70,000/- in order to get the licence for running the cycle stand at Kalupur Railway Station. The power-of-attorney definitely gives ample power to the 1st respondent to take over the management and assets of the firm in case of default in the payment of the amount as per the conditions of the agreement for sanctioning the loan. It is unnecessary for us to elaborately refer to the power-of-attorney since the power given is very wide and it is for the 1st respondent to exercise the same in any manner it likes, including getting a Receiver appointed for the purpose of running the business. The facts of the case clearly reveal that much earlier to the date of grant of licence, which is from 1-9-1987, the tender has been accepted and the parties were aware of the same and that is made clear from the averment made in the power-of-attorney, which is also signed by the appellant herein. Hence, there is absolutely no substance in the argument to the effect that such power could not have been granted even before obtaining the licence. It is for the purpose of paying the earnest money, the loan has been got from the 1st respondent-Bank, even though the licence was taken in the name of one of the partners of the 2nd respondent-firm. The appellant now turns round and says that the licence is in his individual capacity, and as such, he cannot be bound by the 2nd respondent and Receiver cannot be appointed and no action can be taken against the appellant herein. This argument runs counter to the facts of the case and also the averments in the irrevocable power-of-attorney executed by the appellant on behalf of the 2nd respondent-firm. In substance, the licence, though taken in the name of the appellant as one of the partners of the firm, is for the benefit of the firm and the loan obtained clearly establishes that it is for paying the deposit money and earnest money towards the licence now in question.
10. Section 100 of the Gujarat Co-operative Societies Act, 1961, reads as follows:
100. (1) Where a dispute has been referred to the Registrar or his nominee or board of nominees u/s 98 or u/s 110 or where the Registrar or the person authorised u/s 93 hears a person against whom charges are framed under that section, the Registrar or his nominee or board of nominees, or as the case may be, the person so authorised u/s 93 if satisfied on enquiry or otherwise that a party to such dispute or against whom proceedings are pending u/s 93 with intent to defeat, delay or obstruct the execution of any award or the carrying out of any order that may be made.
(a) is about to dispose of whole or any part of his properly, or
(b) is about to remove the whole or any part of his property from the jurisdiction of the Registrar, may, unless adequate security is furnished, direct conditional attachment of the said property and such attachment shall have the same effect as if made by a competent Civil Court.
(2) Where a direction to attach property is issued under Sub-section (1) the Registrar, his nominee or board of nominees or the person authorised, u/s 93 shall issue a notice calling upon the person whose property is so attached to furnish such security within such period as may be specified in the notice, and if the person fails to provide the security so demanded, the Registrar or his nominee or board of nominees or, as the case may be the person authorised u/s 93 may confirm the order and, after the decision in the dispute or the completion of the proceedings referred to in Sub-section (1) may direct the disposal of the property so attached towards the claim if awarded.
(3) Attachment made under this section shall not affect the right subsisting prior to the attachment of the property, of persons not parties to the proceedings in connection with which the attachment is made, or bar any person holding a decree prior to such attachment against the person whose property is so attached from applying for the sale of the property under attachment in execution of such decree.
By reading the Section, it is clear that be power to attach would include all the powers to effectively enforce the rights of the Cooperative Bank including the appointment of a Receiver to take charge of the property and collect the amount and the incidental power, since they are inherent in the power given under Sections 96 and 100 of the Gujarat Co-operative Societies Act. Mr. Memon, the learned Counsel appearing for the appellant, after submitting that there is absolutely no power for the Registrar to appoint the Receiver, contended that the order appointing the Receiver is a nullity and hence, has to be quashed. Interpreting the Section we have already held in paragraph supra, that such power is with the Registrar.
11. The decision in the case of
(6) The answer to these contentions must depend on what the position in law is when a Court entertains a suit or an appeal over which it has no jurisdiction, and what the effect of Section 11 of the Suits Valuation Act is on that position. It is a fundamental principle well-established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was ''coram non judice'' and that its judgment and decree would be nullities. The question is what is the effct of Section 11 of the Suits Valuation Act on this position.
Mr. Memon cited another decision in the case of
11. It is now well established that a quasi judicial authority cannot review its own order, unless the power of review is expressly conferred on it by the Statute under which it derives its jurisdiction The Vice-Chancellor in considering the question of approval of an order of dismissal of the Principal, acts as a quasi judicial authority. It is not disputed that the provisions of the U.P. State Universities Act, 1973 or the Statutes of the University do not confer any power of review on the Vice-Chancellor. In the circumstances, it must be held that the Vice-Chancellor acted wholly without jurisdiction in reviewing her order dated January 24, 1987 by her order dated March 7, 1987. The said order of the Vice-Chancellor dated March 7, 1987 was a nullity.
We do not think that these two decisions have any application to the facts of the present case.
12. It is contended by Mr. Memon that by appointing the Receiver, the appellant is deprived of his livelihood. We are afraid that we cannot countenance such an argument. The appellant, who is one of the partners of the firm, got the loan through the partnership from the 1st respondent. After considering fully the legality of the recovery, the 1st respondent is legally proceeding against the parties concerned in order to recover its lawful dues. The question of deprivation of the livelihood cannot at all come into play on the facts and circumstances of the present case.
13. It is contended that there is no relationship between the partnership concern, that is respondent No. 2 and the Bank i.e., respondent No. 1 for the purpose of invoking Section 96 of the Gujarat Co-operative Societies Act. Mr. Memon, the learned Counsel appearing for the appellant said that such a point was raised before the learned single Judge, but it has not been dealt with by the learned single Judge. Factually, it is seen from the plaint filed before the Registrar that there is a clear mention to the effect that the firm is a member of the Co-operative Bank, who is the respondent No. 1. Further, the loan taken for the business, though the licence of the said business stands in the name of the appellant, it is only for the benefit of the 2nd respondent-firm, of which the appellant is a partner. Hence, the appellant and the firm are fully liable to answer the claim of the Bank. It is found from the grounds of appeal that the appellant has not taken this point. Whatever it may be, we do not find any substance in this contention for the reasons stated above and further, the irrevocable power-of-attorney executed by the appellant and the 2nd respondent in favour of the first respondent clearly binds the appellant to answer the claim of the Bank. For all these reasons, we do not think that there is any substance in this contention raised by the learned Counsel appearing for the appellant herein. The facts of the case clearly establish that the partnership is benefitted by the loan advanced by the 1st respondent and such a loan was got for the purpose of its partner, who is the appellant herein. The irrevocable power-of-attorney makes it clear that the licence is for the benefit of the firm, i.e. the 2nd respondent herein. Correctly and legally, the plaint has been filed before the Registrar''s Nominee and the Registrar''s Nominee, by his power under Sections 96 and 100 of the Gujarat Co-operative Societies Act, 1961 has exercised the jurisdiction and has appointed the Receiver in order to safeguard the interest of the Co-operative Bank, which is the 1st respondent herein.
14. It is made clear that the order of the learned single Judge to the effect that the Receiver would pay necessary salary to the staff, will stand.
15. The decision given by us is, on the basis of the documents produced before us and arguments advanced before us.
16. For all these reasons, we do not find any merits in any of the contentions raised by the learned Counsel appearing for the appellant herein and accordingly, this Letters Patent Appeal is dismissed.
17. Mr. Memon, the learned Counsel appearing for the appellant, finally submitted that stay of this order may be granted in order to enable the appellant to approach the higher forum. The learned single Judge thought it fit to dismiss such a prayer. The amount due to the Bank runs to several lakhs. Even on a modest rate, the interest will be more than Rs. 1,000/- per day. Considering the huge amount to be paid to the 1st respondent Co-operative Bank, we do not think that the order appointing the Receiver can be stayed any further. Hence, the prayer to grant stay is refused.
